SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

-------------------------------------------------------------------------------

                                    FORM 10-K
(Mark one)
[ X ]    Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 For the fiscal year ended March 31, 1999 or

[   ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 For the transition period from __________________
         to ____________________

                         COMMISSION FILE NUMBER: 0-21903
                              ORA ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

               DELAWARE                                95-4607830
               --------                                ----------
     (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                 Identification No.)

            9410 OWENSMOUTH AVE.
            CHATSWORTH, CALIFORNIA                          91311
            ----------------------                          -----
     (Address of principal executive offices)             (Zip Code)

                                 (818) 772-2700
              (Registrant's telephone number, including area code)

     Securities registered pursuant to Section 12(b) of the Act: None

     Securities registered pursuant to Section 12(g) of the Act: Common Stock,
par value $.001 per share; Class A Warrants; Class B Warrants; Class C Warrants;
Class D Warrants

     Indicate by check mark whether the registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes  X      No
                                    -----       -----

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

                                 Yes         No   X
                                     -----      -----




                                 Page 1 of 45
<PAGE>


     Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                 Yes   X     No
                                     -----      -----

      The aggregate market value of the voting stock held by non-affiliates of
the registrant at June 25, 1999 was approximately $746,118. The registrant
had 6,910,063 shares of common stock, par value $.001 per share outstanding at
June 25, 1999.

     The registrant had each of 481,029 Class A Warrants; 647,146 Class B
Warrants; 566,022 Class C Warrants; and 734,225 Class D Warrants, outstanding at
June 25, 1999.

     Documents Incorporated by Reference (To the Extent Indicated Herein):
Portions of the Definitive Proxy Statement for the 1999 Annual Meeting (in Part
III).


































                            Exhibit Index on Page 41

                                 Page 2 of 46
<PAGE>


ITEM 1 - BUSINESS


GENERAL

ORA Electronics, Inc. ("ORA" or the "Company") is a developer and supplier of
interface, connectivity solutions and peripheral accessories for wireless
communication devices, including cellular telephones, personal communications
systems ("PCS") and pagers, computing devices and intelligent transportation
systems ("ITS"). The Company currently carries over 1,100 products which are
sold to over 400 customers in the United States, and throughout North, Central
and South America. Among the Company's customers are major mass market retailers
such as OfficeMax and Cablevision Electronics, service providers and cellular
carriers, original equipment manufacturers ("OEMs"), auto manufacturers,
regional distributors and dealers.

The Company is experiencing a significant reduction in its business and projects
that ongoing cash flow may not be sufficient to sustain business operations
after September 30, 1999. See the Liquidity and Capital Resources section of
Management's Discussion and Analysis of Financial Condition and Results of
Operations for a more complete discussion of this issue.

The Company's business began as a sole proprietorship in 1974 under the name ORA
Electronics and was incorporated in California in 1979 under the name Alliance
Research Corporation ("Alliance"). The Company's products have been primarily
sold under the "ORA" trade name. In December 1996, Alliance merged into ORA
Electronics, Inc. for the purposes of effecting its name change and
reincorporation from California to Delaware. References herein to "ORA" or the
"Company" include Alliance prior to the date of such merger, as applicable.

From April, 1987 to December 1996, the Company was taxed as an S corporation
under the Internal Revenue Code of 1986, as amended. From December 1996 forward,
the Company has been taxed as a C corporation.

INDUSTRY

Wireless communications technology encompasses wireless communications devices
such as handheld, mobile and transportable handsets, pagers and two-way radios.
Since its inception in 1983, the wireless handset market has grown rapidly. The
Company believes that the wireless communications industry will continue to grow
for a number of reasons. Economic growth, increased service availability and the
lower cost of wireless service compared to conventional landline telephone
systems in emerging markets will, the Company believes, continue to create
demand for wireless communications products. The Company also believes that the
change from analog to digital technology will increase overall market growth and
encourage consumers to purchase the next generation of products. In addition,
advanced digital technologies have led to increases in the number of network
operators and resellers, which have resulted in increased demand for wireless
communications products. Finally, the proliferation of new manufacturers is
expected to lower prices, increase product selection and expand sales channels.

In the United States, wireless handset service was developed as an alternative
to conventional landline systems and existing mobile handset service and has
been one of the fastest growing market segments in the communications industry.


                                 Page 3 of 45
<PAGE>


The number of U.S. wireless subscribers has grown significantly since the
inception of the wireless handset industry in 1983. The Company believes that
the U.S. market for wireless services will continue to expand due to the
increasing affordability and availability of such services and shorter
development cycles for new products and enhancements. In addition, many wireless
service providers are upgrading their existing systems from analog to digital
technology as a result of capacity constraints in many of the larger wireless
markets and in order to respond to competition. Digital technology increases
system capacity and offers other advantages, such as improved overall average
signal quality, improved call security, lower incremental costs for additional
subscribers and the ability to provide data transmission services.

PRODUCTS

Sales of wireless accessory products accounted for approximately 97.5%, 97.1%
and 96.3% of ORA's net sales for the fiscal years ended in 1999, 1998 and 1997,
respectively. The various power cords offered by ORA as part of its wireless
handset accessory line accounted for approximately 21.3%, 22.7% and 21.9% of
ORA's net sales for the fiscal years ended March 31, 1999, 1998 and 1997,
respectively. ORA offers 23 different stock keeping units of power cords which
support different wireless telephone models offered by 14 different
manufacturers.

A new product category in ORA's line is ITS. ORA has developed numerous
proprietary ITS products that allow interconnectivity between automotive safety
systems, entertainment systems, navigation systems and wireless communications
devices. Telcar, a product developed by ORA, serves as an integration hub for
ITS products utilizing ORA's T-bus data protocols. Initial sales of this product
are expected to commence at the end of the second quarter of its fiscal year
ending March 31, 2000 or early in the following quarter. ORA's patent
applications with respect to these products have been approved by the U.S.
Patent and Trademark Office.

CUSTOMERS

ORA sells its products to over 400 customers in the United States and
throughout North, Central and South America. Among ORA's customers are major
retailers, such as OfficeMax and Cablevision Electronics, service providers and
cellular carriers, original equipment manufacturers ("OEMs"), auto
manufacturers, regional distributors and dealers.

Pursuant to its distribution agreement with ORA Electronics (UK) Ltd.
("ORA UK"), an unaffiliated company, the Company may not sell its products
bearing the "ORA" trade name and logo outside of North, Central and South
America. Under such agreement, which extends into perpetuity, the Company does
not generate any revenues with respect to sales made by ORA UK.

For the fiscal years ending March 31, 1999, 1998 and 1997, one customer, Circuit
City, accounted for 52.6%, 38.5% and 25.4%, respectively, of the Company's net
sales. For the fiscal years ending March 31, 1999, 1998 and 1997, Staples
accounted for approximately 5.9%, 17.3% and 9.2%, respectively, of the Company's


                                 Page 4 of 46
<PAGE>


net sales.  Circuit City is currently significantly reducing its business
relationship with the Company.  For a more complete discussion of this matter,
see Management's Discussion and Analysis of Financial Condition and Results of
Operations for Fiscal Year ended March 31, 1999 compared to Fiscal Year ended
March 31, 1998.

MARKETING AND CUSTOMER SUPPORT

ORA places a strong emphasis on the marketing of its products. Though its
product line features many technologically sophisticated and innovative
products, the Company believes that its greatest strengths lie in its abilities
to manufacture for, and communicate with, the mass market, provide useable
products and superior customer service, and introduce high technology products
to the market.

To ensure comprehensive control of the marketing process, ORA has a complete
in-house marketing services department. The marketing services department
provides a full range of services. In addition to ad design and production,
product photography, line brochures, packaging and catalogs, the department
provides a number of specialized customer services including a complete
planogram service, cooperative advertising programs, store merchandising,
in-store display design and production, customer-specific collateral material,
ad slicks, clip art services, semi-private labeling, private label catalogs,
mail inserts and trade show exhibit management.

SALES AND DISTRIBUTION

ORA's products are distributed via national and regional consumer electronics
retailers, office supply retailers, department stores, auto parts chains and
other multiple outlet retailers, wireless service providers, catalog and mail
order houses, and electronics distributors. In addition, ORA designs and
supplies products to manufacturers of wireless communications devices,
automobile manufacturers and other manufacturers under "private label" and
special products agreements.

In order to facilitate prompt deliveries to its retail customers, the Company
carries high levels of inventories. ORA's policy is to provide a 24-hour
turnaround on a select group of its products which are stocked in depth. In
addition, an ongoing "stock balancing" program allows retailers to return
current, slow moving items every three months in exchange for an offsetting
double order. ORA's competitive return policy for non-salable products,
including damaged products, results in significant returns for credit. ORA
products carry warranties for defects in material or workmanship. These
warranties vary from one year to lifetime on passive devices, with most products
carrying warranties of three to five years. The Company's payment terms are
typically 30 to 60 days. However, under special circumstances, the Company will
offer extended terms.

The Company's business is seasonal. For its fiscal years ending March 31, 1999,
1998 and 1997, on average, approximately 29.7% of the Company's net sales were
in its second fiscal quarter and 26.8% in its third fiscal quarter, with the
balance split approximately evenly between the first and fourth fiscal quarters.


                                 Page 5 of 46
<PAGE>


BACKLOG

Most orders received by the Company are for immediate delivery. As of March 31,
1999 and 1998, the Company had approximately $1,314,000 and $1,277,000,
respectively, in backlog orders, including orders for current delivery, orders
for later delivery, back orders and special orders, all of which may be
cancelled or modified by the customer.

RESEARCH AND DEVELOPMENT

The Company has always focused on innovation as a means of maximizing margins
and capturing and maintaining market share. During its fiscal years ended March
31, 1999, 1998 and 1997, as reflected in its audited financial statements, the
Company spent approximately $625,000, $440,000 and $550,000, respectively, on
research and development related activities. In addition, the Company estimates
that approximately an additional $57,000, $36,000 and $80,000, respectively, was
spent for purchased materials that do not have alternative future uses. ORA
maintains an in-house research and development engineering staff. The Company
maintains extensive research and testing facilities (including an anechoic
chamber) at its corporate headquarters, allowing it to conduct sophisticated
operations such as testing radiation patterns for antenna and, thus, promoting
product safety. ORA also has strategic relationships with other independent
research and development companies to utilize their respective specialized
skills or equipment.

Many of ORA's products carry UL listings or FCC approvals. The Company has been
awarded the prestigious Innovation in Engineering Award from the Electronics
Industry Association five times in the last five years. Additionally, ORA
is Underwriter Laboratories ISO 9000 certified and operates under the ISO 9002
quality standards.

MANUFACTURING AND PACKAGING

ORA out-sources the manufacturing of its products using contract manufacturers
and "bid" manufacturing. Contract manufacturers are used mainly for proprietary
products such as Telcar, battery chargers and hands-free adapters. Bid
manufacturers are used mainly to produce commodity items such as battery packs
and power cords. Manufacturing plants are located in the US, Taiwan, China, Hong
Kong and Korea. ORA is not dependent on any one manufacturer to produce
products. The Company believes that such production is "portable" and can be
moved rapidly to other manufacturers and assemblers. The Company is, however,
dependent on the availability of raw materials and labor, and is subject to
customs regulations and quotas both in the US and abroad.

The products manufactured for the Company in Asia, which represent substantially
all of the Company's products, are purchased by the Company from a foreign
trading company, Data-Spec Taiwan, Limited ("Data-Spec Taiwan"). Data-Spec
Taiwan negotiates purchases with the various contract manufacturers, "bid"
manufacturers and remits payment to these companies for the products. Data-Spec
Taiwan also represents ORA in negotiations with respect to procurement,
specifications compliance and quality assurance. Data-Spec Taiwan is ISO 9000
certified.  Jack D.W. Song who owns over 10% of the Company's outstanding
Common Stock, is the majority owner of Data-Spec Taiwan.



                                 Page 6 of 46
<PAGE>


The Company receives most of its inventory in bulk shipments. The bulk products
are then assembled and packaged in various configurations and kits utilizing
in-house packaging equipment and materials.

ASSET MANAGEMENT

Inventory control is important to the Company's ability to maintain margins
while offering its customers competitive prices and rapid delivery of a wide
variety of products. To be in a position to deliver products rapidly, the
Company maintains a significant investment in its product inventory and,
therefore, is subject to the risks of inventory obsolescence and excessive
inventory levels.

COMPETITION

The consumer electronics and wireless telecommunications accessory market is
highly fragmented and subject to intense competition. The market for wireless
products is characterized by rapidly changing technology and frequent new
product introductions. The Company's success depends in large part upon its
ability to identify and design products that will meet the changing requirements
and demands of the marketplace. ORA's competitors include (a) various companies
which offer broad lines of consumer electronic accessories, (b) other accessory
companies which offer certain product lines and (c) manufacturers of brand name
consumer electronics hardware, which market their own lines of similar
accessories. Certain of the Company's existing and potential competitors have
greater financial, technical, marketing or manufacturing resources and may
develop new accessories and other products that are superior to those of the
Company. The Company competes primarily on the basis of product variety and
quality, customer service and support, product reliability, company and brand
name recognition, ability to meet customer delivery needs, price, product
features and proprietary products. There can be no assurance that the Company
will be able to identify, obtain and offer products necessary to remain
competitive.

TRADEMARKS AND PATENTS

The Company actively pursues a program of protecting its intellectual property
by seeking patent, copyright and trademark protection for its products to the
maximum extent permissible under U.S. and foreign laws. Currently, the Company
owns 36 issued patents and has an additional five pending patent applications
covering various unique and novel aspects of certain of its products in both the
United States and in some foreign jurisdictions. Most of the Company's patents
have the majority of their term remaining.

The Company also owns 20 trademarks registered on the Principal Trademark
Register of the United States under which the Company markets its goods and
offers its services. The Company also copyrights its manuals, sales and product
literature, as well as numerous software codes and protocols necessary to
operate several of its processor controlled products and systems.

No assurance can be given that the Company's existing patents or any future
patents will not be challenged, invalidated or circumvented, or that competitors
of the Company will not independently develop or patent technologies which are
substantially equivalent or superior to the Company's technologies.


                                 Page 7 of 45
<PAGE>

EMPLOYEES

As of June 15, 1999, the Company had 51 employees. None of the Company's
employees is covered by a collective bargaining agreement. The Company believes
that its relationship with its employees is satisfactory.

ITEM 2 - PROPERTIES

The Company owns its 80,000 square foot headquarters and distribution facility
in Chatsworth, California. Such property is subject to a deed of trust in favor
of the Aid Association for Lutherans, which entity provided financing for the
acquisition of the property.

ITEM 3 - LEGAL PROCEEDINGS

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended March 31, 1999.

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Common Stock

The Company's common stock, par value $.001 per share (the "Common Stock"), was
listed for trading on December 20, 1996, following its merger with North
American Energy of Delaware, Inc., on the OTC Bulletin Board. As of June 25,
1999, there were approximately 619 stockholders of record of the Company's
Common Stock. On June 25, 1998, the last reported sale price of the Common Stock
on the OTC Bulletin Board was $0.19. The following table sets forth the high and
low sales prices of the Common Stock for each quarterly period during the most
recent two fiscal years:

                                                             High          Low
                                                             ----          ----
    Fiscal year ended March 31, 1998:

        First Quarter...............................         $4.38        $1.25
        Second Quarter..............................          4.38         2.25
        Third Quarter                                         2.25         1.50
        Fourth Quarter..............................          2.00         1.25

    Fiscal year ended March 31, 1999:

        First Quarter...............................          2.31         1.56
        Second Quarter..............................          2.25         1.50
        Third Quarter...............................          1.75         1.63
        Fourth Quarter..............................          1.94         0.63









                                  Page 8 of 46

<PAGE>

Dividend Policy

The Company intends to use its cash flow from operations to finance its working
capital needs. The payment of cash dividends, if any, in the future is within
the discretion of the Company's Board of Directors and will depend upon the
Company's earnings, its capital requirements and financial condition and other
relevant factors. Since having become a C corporation for tax purposes in
December 1996, the Company has not paid a dividend on its Common Stock and does
not intend to declare any cash dividends in the foreseeable future.

ITEM 6 - SELECTED FINANCIAL DATA

The following table sets forth certain selected financial data regarding the
Company which is qualified by reference to, and should be read in conjunction
with, the financial statements and notes thereto (see "Index to Financial
Statements") and "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations." The income statement and balance sheet
data presented below have been derived from the Company's financial statements.
The selected pro forma income statement data set forth below is for
informational purposes only and may not necessarily be indicative of the
Company's results of operations in the future.










                                 Page 9 of 46
<PAGE>

                              ORA ELECTRONICS, INC.
                    STATEMENT OF INCOME AND RETAINED EARNINGS

<TABLE>
                                                                                Years Ended March 31,
<CAPTION>
<S>                                               <C>              <C>            <C>             <C>              <C>
                                                 --------------------------------------------------------------------------------
                                                       1999            1998            1997            1996            1995
                                                 ---------------- --------------  --------------  --------------- ---------------
Net sales....................................      $  13,544,551   $ 15,443,432    $ 18,718,113     $ 24,110,436    $ 25,308,778
Cost of goods sold ..........................          8,005,084      9,152,641      12,211,623       15,354,206      15,687,331
                                                 ---------------- --------------  --------------  --------------- ---------------
Gross profit.................................          5,539,467      6,290,791       6,506,490        8,756,230       9,621,447
                                                 ---------------- --------------  --------------  --------------- ---------------
Operating Expenses:
Selling and shipping expenses................          2,449,563      2,434,547       3,163,863        3,997,970       4,161,196
General and administrative expenses      ....          4,121,929      5,742,427       5,183,082        5,202,191       4,407,590
                                                 ---------------- --------------  --------------  --------------- ---------------
Total operating expenses.....................          6,571,492      8,176,974       8,346,945        9,200,161       8,568,786
                                                 ---------------- --------------  --------------  --------------- ---------------
Other (income) expenses:
Interest expense.............................            714,619        702,128       1,072,107        1,056,529         898,534
Other expense (income). .....................         (1,789,587)       (10,627)       (231,620)         (58,783)        (56,790)
                                                 ---------------- --------------  --------------  --------------- ---------------
Total other (income) expenses................         (1,074,968)       691,501         840,487          997,746         841,744
                                                 ---------------- --------------  --------------  --------------- ---------------
Total expenses...............................          5,496,524      8,868,475       9,187,432       10,197,907       9,410,530
                                                 ---------------- --------------  --------------  --------------- ---------------
Net income (loss) before income taxes........             42,943     (2,577,684)     (2,680,942)      (1,441,677)        210,917
Provision (benefit) for income taxes.........                  0              0               0          (23,822)         27,861
                                                 ---------------- --------------  --------------  --------------- ---------------
Net income (loss)............................      $      42,943   $ (2,577,684)   $ (2,680,942)    $ (1,417,855)   $    183,056
                                                 ================ ==============  ==============  ===============  ===============
PRO FORMA DATA:
Historical income (loss) before income taxes..     $      42,943   $ (2,577,684)   $ (2,680,942)    $ (1,441,677)   $     210,917
Proforma income tax (provision) benefit......                  0              0    $          0     $    713,913    $     (84,367)
                                                 ---------------- --------------  --------------  --------------- ---------------
Proforma net income (loss)...................      $      42,943   $ (2,577,684)   $ (2,680,942)    $   (727,764)   $     126,550
                                                 ---------------- --------------  --------------  --------------- ---------------
Proforma net income (loss) per share.........      $        0.01   $      (0.39)   $      (0.41)    $    (727.76)   $      126.55
                                                 ---------------- --------------  --------------  --------------- ---------------
Proforma weighted average common shares
   outstanding...............................          6,909,292      6,627,697       6,589,068            1,000           1,000
                                                 ================ ==============  ==============  =============== ===============
BALANCE SHEET DATA:
Working capital..............................      $     894,757   $  1,131,155    $  2,829,897     $  1,290,836    $  2,892,990
                                                 ================ ==============  ==============  =============== ===============
Total assets.................................      $  13,627,151   $ 15,329,159    $ 16,728,304     $ 17,128,943    $ 17,020,943
                                                 ================ ==============  ==============  =============== ===============
Long term debt...............................      $   5,653,510   $  6,105,477    $  5,601,516     $  7,188,902    $  7,246,168
                                                 ================ ==============  ==============  =============== ===============
Stockholders' equity.........................      $   2,184,823   $  2,141,880    $  4,400,674     $  1,278,217    $  2,696,072
                                                 ================ ==============  ==============  =============== ===============
</TABLE>


                                  Page 10 of 46
<PAGE>


The proforma data above is provided for information purposes only, to reflect
the effects of federal and state income taxes had the Company had been taxed as
a C corporation rather than an S corporation, since April 1, 1994.


ITEM 7 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

Management's discussion and analysis should be read in conjunction with the
Company's consolidated financial statements and the notes thereto.

RESULTS OF OPERATIONS

The following table sets forth operating results (as a percentage of net sales)
for the periods indicated.

                                             Years Ended March 31,

                                       1999         1998         1997
                                       ----         ----         ----

Net sales                              100.0%       100.0%       100.0%
Cost of sales                           59.1         59.3         65.2
Gross Profit                            40.9         40.7         34.8
Selling and shipping expense            18.1         15.3         16.9
Administrative and general expense      30.4         37.6         27.7
Loss from Operations                    (7.6)       (12.2)        (9.8)
Interest expense                         5.3          4.5          5.7
Other (income)                         (13.2)        (0.1)        (1.2)
Net income (loss) before taxes           0.0%       (16.7)%      (14.3)%


FISCAL YEAR ENDED MARCH 31, 1999 COMPARED TO FISCAL YEAR ENDED MARCH 31, 1998

Net Sales. Net sales decreased 12.3% to $13,544,551 in fiscal year 1999,
compared to $15,443,432 in fiscal year 1998, a decrease of $1,898,881. This
decrease reflects lower than expected orders from consumer electronics retailers
who have reported comparable store sales decreases compared to the prior year.
Retailers have reported that their wireless telephone activations are lower as a
result of reduced financial incentives offered to them by wireless telephone
carriers. The Company believes that its traditional retail customers may face
increased competitive pressures from wireless service providers and that,
consequently, orders for its wireless products from such retailers may continue
to decline. In addition, the Company has been notified by its largest customer,
Circuit City, that continuing product orders will be substantially reduced
beginning in May, 1999. Net sales to Circuit City during fiscal
year 1999 were $7,124,434, or 52.6% of the total annual net sales of
$13,554,551. Net sales to Circuit City during fiscal year 1998 were $5,945,721,
or 38.5% of the total annual net sales of $15,446,432. Current expectations are
that business with Circuit City may be reduced by as much as 90%, or greater,
from its current levels. The Company is actively exploring ways to replace this
expected reduction in net sales, including alternative channels of distribution,
however, no assurance can be given that the Company will be able to do so.

                                  Page 11 of 45
<PAGE>

If the Company is not able to substantially replace the expected reduction in
Circuit City business by approximately September, 1999, the Company projects
that it will have serious cash flow deficiencies.  See the Liquidity and
Capital Resources section of Management's Discussion and Analysis of Financial
Condition and Results of Operations for a more complete discussion of this
issue.

Gross Profit. Gross profit decreased by $751,324, or 11.9%, to $5,539,467 for
the fiscal year ended March 31, 1999 compared with $6,290,791 in fiscal year
1998, while gross profit as a percentage of net sales increased slightly to
40.9% in fiscal year 1999 from 40.7% in fiscal year 1998. The decrease in
absolute dollars is primarily attributable to the decreased number of units
sold.

Selling and Shipping Expense. Selling and Shipping expense increased slightly by
$15,016, or 1.0%, to $2,449,563 in fiscal year 1999 from $2,434,547 in fiscal
year 1998. Increases in media and promotional advertising and trade show
expenses of approximately $200,000 were partially offset by lower costs of
shipping, warehousing, freight and sales commissions associated with the
decreased sales volume.

Administrative and General Expense. Administrative and general expense decreased
by $1,620,498, or 28.2%, to $4,121,929 in fiscal year 1999 from $5,742,427 in
fiscal year 1998. The decrease is primarily attributed to the legal fees and
settlement costs associated with the resolution of the Company's patent
litigation against Telular Corporation in fiscal year 1998.

Interest Expense. The Company had interest expense of $714,619 in fiscal year
1999 compared to $702,128 in fiscal year 1998. The increase is primarily
attributable to increases in the Company's bank line of credit usage during
fiscal 1999.

Other Income. Other income increased to $1,789,587 for fiscal year 1999 compared
to $10,627 in fiscal year 1998. The increase is primarily attributable to
approximately $1,675,000 in royalty income received in fiscal year 1999 as a
result of the Company granting to ORA Electronics (UK) Limited, an unaffiliated
company, an exclusive royalty-free right to use certain of the Company's
trademarks, including the "ORA" name, in perpetuity worldwide, excepting North,
Central and South America.  The royalty income received from this transaction
is considered non-recurring.

Income Taxes. The Company has made no provision for income taxes as it has a
history of net losses, which has resulted in tax loss carry-forwards. At March
31, 1999, the Company had available federal net operating loss carry-forwards of
approximately $3,174,000, which expire in 2012 through 2013, and state net
operating loss carry-forwards of approximately $1,423,000, which expire in 2002
through 2003


FISCAL YEAR ENDED MARCH 31, 1998 COMPARED TO FISCAL YEAR ENDED MARCH 31, 1997

Net Sales. Net sales decreased 17.5 % to $15,443,432 in fiscal year 1998,
compared to $18,718,113 in fiscal year 1997, a decrease of $3,274,681. This
decrease reflected lower than expected orders from consumer electronics
retailers who reported comparable store sales decreases compared to the prior
year. Retailers reported that their wireless telephone activations were lower as
a result of reduced financial incentives offered to them by wireless telephone

                                 Page 12 of 46
<PAGE>


carriers. The Company believed that its traditional retail customers might face
increased competitive pressures from wireless service providers and that,
consequently, orders for its wireless products from such retailers could
continue to decline. The Company has been exploring alternative channels of
distribution. The Company allowed stock balancing (return of unsold items for
different merchandise) to enable customers to freshen inventory. Higher than
expected returns from customers relating to such stock balancing also
contributed to lower net sales.

Gross Profit. Gross profit decreased to $6,290,791 for fiscal year 1998 from
$6,506,490 in fiscal year 1997. Gross profit as a percentage of net sales
increased to 40.7% in fiscal year 1998 from 34.8% in fiscal year 1997. The
decrease in absolute dollars was primarily attributable to the decreased number
of units sold combined with an increase in customer returns of unsold
merchandise. The increase in profit margin as a percentage of net sales was
primarily attributable to the Company's successful efforts to procure its
product inventory at lower prices, primarily from Taiwan and China.

Operating expenses in total decreased to $8,176,974 in fiscal year 1998 from
$8,346,945 in fiscal year 1997. Selling and shipping expenses decreased to
$2,434,547 in fiscal year 1998 compared to $3,163,863 in fiscal year 1997,
primarily attributable to lower costs of shipping, warehousing, freight, sales
commissions, and lower expenditures for advertising. Media, promotional and
catalogue advertising decreased to $33,719 in fiscal year 1998 from $105,991 in
fiscal year 1997. Administrative and general expenses increased to $5,742,427 in
fiscal year 1998 compared to $5,183,082 in fiscal year 1997, primarily
attributable to higher legal fees associated with its patent litigation against
Telular Corporation, higher bank fees and bad debt experience, partially offset
by reductions in personnel.

Operating expenses as a percentage of net sales increased to 52.9% in fiscal
year 1998 from 44.6% in fiscal year 1997, primarily due to the decrease in net
sales.

The Company had interest expense of $702,128 in fiscal year 1998 compared to
$1,072,107 in fiscal year 1997. The decrease was primarily attributable to
decreases in the Company's usage of its bank line of credit during fiscal 1998.

Other income decreased to $10,627 for fiscal year 1998 compared to $231,620 in
fiscal year 1997, primarily attributable to a refund of required estimated
Federal income tax payments in fiscal year 1997, resulting from the Company's S
corporation status for most of fiscal 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary cash requirements are to fund working capital needs,
primarily accounts receivable and inventories. Historically, the Company has
satisfied these working capital requirements principally through cash flow from
operations and bank borrowings.


                                 Page 13 of 45
<PAGE>


At March 31, 1999, the Company had $1,807,940 in cash and cash equivalents with
a working capital surplus of $894,757, contrasted to $407,694 in cash and cash
equivalents with a working capital surplus of $1,121,155 at March 31, 1998. Net
cash provided by operating activities was $2,136,854 for the fiscal year ended
March 31, 1999, compared with net cash used in operating activities of $937,077
for the fiscal year ended March 31, 1998. The increase in cash and cash
equivalents of approximately $1,400,000 is primarily attributable to more
current collections of trade accounts receivable of approximately $600,000
combined with the Company's successful efforts to sell much of its slow moving
inventory. Working capital may vary from time to time as a result of
seasonality, new product introductions, capital expenditures, and changes in
inventory and trade accounts receivable levels.

To supplement cash flow from operations, the Company had maintained a $5,000,000
revolving credit facility to be used for general working capital purposes. The
credit agreement (dated April 4, 1997) with FINOVA Capital Corporation
("FINOVA") allowed the Company to borrow funds at Citibank N.A.'s reference rate
plus 1% and there was an unused line fee of 0.5%. The Company had borrowing
capacity from this line of credit of approximately $1,100,000 at March 31, 1999.
In January, 1999, the Company was notified by FINOVA that its revolving line of
credit would not be extended after its scheduled expiration date of April 4,
1999. On May 12, 1999, the entire balance owing at that date was paid and the
relationship with FINOVA was terminated. The Company is attempting to find a
replacement credit facility, but no assurances can be given that the Company
will be able to do so.

The Company believes that available cash, cash flow from operations and any
borrowings that might be made available through a yet to be obtained replacement
credit facility, may not be sufficient to meet operating needs and capital
expenditure requirements in the immediate future.

The Company has incurred operating losses of $1,032,025, $1,886,183 and
$1,840,455 in the fiscal years ended March 31, 1999, 1998 and 1997,
respectively. For several years the Company's major competitors, many with
greater resources, have aggressively lowered their selling prices in an attempt
to increase market share. Although the Company has benefited from its own
internal cost reduction programs, the effects of lower pricing by major
competitors has more than offset the Company's cost reductions.  In addition,
the Company is experiencing a significant reduction in its business with its
largest customer, Circuit City.  See Management's Discussion and Analysis of
Financial Condition and Results of Operations for Fiscal Year ended March 31,
1999 compared to Fiscal Year ended March 31, 1998.

The Chief Executive Officer, along with the rest of the Company's management
team, has been developing a broad operational and financial restructuring plan.
The plan, which is designed to leverage the Company's brand, distribution and
technology strengths, includes reducing costs, disposition of certain assets,
focusing on development of alternative channels of distribution and capitalizing
on the Company's patented technologies. Restructuring costs must be incurred to
implement the plan.


                                  Page 14 of 46
<PAGE>


Going forward, significant cash flow will be needed to pay the restructuring
costs to implement the proposed business plan and to fund losses until the
Company has returned to profitability. While there is no assurance that funding
will be available to execute the plan, the Company is continuing to seek
financing to support its turnaround efforts and is exploring a number of
alternatives in this regard.

The Company's independent public accountants have included a "going concern"
emphasis paragraph in their audit report accompanying the March 31, 1999
financial statements. The paragraph states that the Company's recurring losses
and its inability to secure working capital financing raise substantial doubt
about the Company's ability to continue as a going concern and cautions that the
financial statements do not include adjustments that might result from the
outcome of this uncertainty.

Existing cash flow is not expected to be sufficient to cover liquidity
requirements after September 30, 1999, and the Company is currently facing the
prospect of not having adequate funds to operate its business. See Note 8 to
the financial statements for details of the Company's efforts to obtain a
replacement working capital line of credit. There can be no assurance that an
affordable working capital credit facility can be arranged or that any long-term
restructuring alternative can be successfully initiated or implemented by
September 30, 1999, in which case the Company may be compelled to pursue a
bankruptcy filing in the absence of a proposed or pre-approved financial
restructuring.

On December 23, 1996, the Company obtained a $1,000,000 loan from an unrelated
third party which was used to pay the initial required $1,000,000 reduction on
its then existing credit facility. Such $1,000,000 loan bears interest at 8% per
annum and all principal and interest is due and payable upon maturity on
December 31, 2001.

The loan from the Aid Association for Lutherans ("AAL") obtained by the Company
to purchase its headquarters and distribution facility in Chatsworth, California
is, by its terms, callable by AAL upon six months notice. As of March 31, 1999,
the outstanding principal balance of such loan was $4,531,800. Such loan bears
interest at 9.875% per year, is payable in monthly installments of $43,418,
representing both principal and interest, matures in February 2019 and is
secured by the real property on which the facility is located.

Net cash used in investing activities of $80,794 for fiscal year 1999 is
primarily attributed to approximately $51,000 in capital expenditures and
additional accrued interest on loans receivable from officer.

Net cash used in financing activities of $655,814 for fiscal year 1999
principally reflects repayments on revolving line of credit of approximately
$409,000 and repayments of long term debt of approximately $247,000.

The Company is currently evaluating its management information systems as part
its strategy and growth expectations for the future. The likely result of this
evaluation will be a systems conversion for the Company's core business
processes. Although the ultimate cost of a systems conversion has not yet been
determined, the Company believes that it will incur between $100,000 and
$150,000 related to this project in fiscal 2000, which will include the
purchase of all required hardware, software, and implementation.


                                  Page 15 of 45
<PAGE>


Management believes that, despite the financial hurdles and funding
uncertainties going forward, it has under development a business plan that, if
successfully funded and executed as part of a financial restructuring, can
significantly improve operating results. The support of the Company's vendors,
customers, potential lenders, stockholders and employees will continue to be key
to the Company's future success.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive Income" ("SFAS
130") effective for fiscal years beginning after December 15, 1997. The new
rules establish standards for the reporting of comprehensive income and its
components in financial statements. Comprehensive income consists of net income
and other gains and losses affecting stockholders' equity that, under generally
accepted accounting principles, are excluded from net income, such as unrealized
gains and losses on investments available for sale, foreign currency translation
gains and losses and minimum pension liability. The Company has adopted the
provisions of SFAS 130 as of April 1, 1998. For all periods presented in this
Annual Report, there was no comprehensive income.

In June 1997, the FASB issued SFAS 131, "Disclosures about Segments of an
Enterprise and Related Information", ("SFAS 131") effective for fiscal years
beginning after December 15, 1997. The new rules establish revised standards for
public companies relating to the reporting of financial and descriptive
information about their operating segments in financial statements. SFAS 131 is
effective for the Company in fiscal 1999. The Company currently evaluates its
operations as one segment.

YEAR 2000 ISSUE

Many computer systems and other equipment with embedded chips or processors in
use today were designed and developed using two digits, rather than four, to
specify the year. As a result, such systems will recognize the Year 2000 as "00"
and may assume that the year is 1900 rather than 2000. This is commonly known as
the Year 2000 issue, which could potentially result in a system failure or in
miscalculations causing disruptions of operations, including among other things,
a temporary inability to process transactions, send invoices or engage in other
similar normal business activities. The Company has been informed that the
portion of the Company's computer software systems relating to the general
ledger, payroll and other employee records is presently Year 2000 compliant. The
Company is in the process of evaluating the potential cost to it in addressing
the Year 2000 issue with respect to its other software and the potential
consequences of an incomplete or untimely resolution of the Year 2000 issue. The
Company has been given estimates in the $100,000 to $150,000 range to purchase
and implement new Year 2000 compliant software for those systems that the
Company is aware require such replacement. Although the Company believes that it
will not incur significant costs above these estimates to become completely Year
2000 compliant, no assurance can be given that the Company will not incur
significant additional costs in addressing the Year 2000 issue or that the
failure to adequately address the Year 2000 issue will not have a material
adverse affect upon the Company.



                                  Page 16 of 46
<PAGE>


The Company is contacting its major suppliers, major customers, financial
institutions and others with whom it conducts business to determine that they
will be able to resolve the Year 2000 issue in matters affecting the Company.
The Company at this time cannot make any predictions as to the degree of
compliance by such third parties or the consequences of their noncompliance.
However, if those third parties with whom the Company conducts business are
unsuccessful in implementing timely solutions, the Year 2000 issue could have a
material adverse effect on the Company's business, financial condition and
results of operations.

FORWARD LOOKING INFORMATION

This Annual Report on Form 10-K contains forward-looking statements within the
meaning of that term in the Private Securities Litigation Reform Act of 1995
(Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934). Additional written or oral forward-looking statements may
be made by the Company from time to time, in filings with the Securities
Exchange Commission or otherwise. Statements contained herein that are not
historical facts are forward-looking statements made pursuant to the safe harbor
provisions referenced above. The matters discussed herein with respect to the
anticipated growth of the wireless telephone industry and the development of new
wireless communications technologies, the introduction of new products by the
Company, the Company's ability to penetrate new distribution channels, the
Company's ability to restructure its existing business, the Company's ability to
replace business from lost customers, future sales levels, costs associated with
the Company's new management information system, compliance with financial
covenants in loan agreements, the Company's ability to secure future financing
and the potential outcome of any pending litigation involving the Company, among
others, are forward looking statements. In addition, when used in this
discussion, the words "anticipates," "expects," "intends," "plans" and
variations thereof and similar expressions are intended to identify
forward-looking statements.

Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified based on current expectations.
Consequently, future events and actual results could differ materially from
those set forth in, contemplated by, or underlying the forward-looking
statements contained in this Annual Report. Statements in this Annual Report,
particularly in "Item 1. Business", "Item 3. Legal Proceedings", the Notes to
Financial Statements and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations," describe certain factors, among
others, that could contribute to or cause such differences. Other factors that
could contribute to or cause such differences include, but are not limited to,
unanticipated developments in any one or more of the following areas: the
receptivity of consumers to new consumer electronics technologies, the rate and
consumer acceptance of new product introductions, competition, the number and
nature of customers and their product orders, timely replacement of lost
customers, pricing, foreign manufacturing, sourcing and sales (including foreign
government regulation, trade and importation concerns and fluctuation in
exchange rates), borrowing costs, the receptivity in the market place of the
Company's restructuring efforts, changes in taxes due to changes in the mix of
U.S. and non U.S. revenue, pending or threatened litigation, the availability of
key personnel and other risk factors which may be detailed from time to time in
the Company's Securities and Exchange Commission filings.


                                  Page 17 of 46
<PAGE>


Readers are cautioned not to place undue reliance on any forward-looking
statements contained herein, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of unexpected
events.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See "Index to Financial Statements" at Item 14(a) for a listing of the financial
statements and supplementary data submitted as part of this report.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.


                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item will be contained in the Company's Proxy
Statement for its Annual Shareholders Meeting scheduled for September 21, 1999,
to be filed with the Securities and Exchange Commission within 120 days after
March 31, 1999, and is incorporated herein by reference.

ITEM 11 - EXECUTIVE COMPENSATION

The information required by this item will be contained in the Company's Proxy
Statement for its Annual Shareholders Meeting scheduled for September 21, 1999,
to be filed with the Securities and Exchange Commission within 120 days after
March 31, 1999, and is incorporated herein by reference.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item will be contained in the Company's Proxy
Statement for its Annual Shareholders Meeting scheduled for September 21, 1999,
to be filed with the Securities and Exchange Commission within 120 days after
March 31, 1999, and is incorporated herein by reference.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item will be contained in the Company's Proxy
Statement for its Annual Shareholders Meeting scheduled for September 21, 1999,
to be filed with the Securities and Exchange Commission within 120 days after
March 31, 1999, and is incorporated herein by reference.







                                 Page 18 of 46
<PAGE>


ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are filed as a part of this Report:

     (1)  Financial Statements:

          Report of Independent Auditors

          Balance Sheets at March 31, 1999 and 1998

          Statements of Operations for the Twelve-Month Periods Ended
          March 31, 1999, 1999 and 1997

          Statements of Stockholders' Equity Twelve-Month Periods Ended
          March 31, 1999 and 1998

          Statements of Cash Flows for the Twelve-Month Periods
          Ended March 31, 1999, 1998 and 1997

          Notes to Financial Statements

     (2)  Financial Statement Schedules:

          The schedules specified under Regulation S-X are either not
          applicable or immaterial to the Company's financial statements
          for each of the three years in the period ended March 31, 1999.

     (3)  Exhibits:

          The Exhibits listed on the accompanying Index to Exhibits
          immediately following the financial statement schedules are
          filed as part of, or incorporated by reference into, this
          Report.

Exhibit No.                        Description
-----------                        -----------

     2.1     Plan of Reorganization of North American Energy of
             Delaware, InC. (1)

     2.2     Agreement and Plan of Merger between ORA Electronics, Inc., a
             Delaware corporation, and North American Energy of Delaware, Inc.,
             a Delaware corporation. (2)

     3.1     Restated Certificate of Incorporation of ORA
             Electronics, Inc, (2)

     3.2     Bylaws of ORA Electronics, Inc. (2)

     4.1     Specimen Common Stock Certificate of ORA Electronics, Inc. (2)

     4.2     Specimen Class A Warrant Certificate. (2)

     4.3     Specimen Class B Warrant Certificate. (2)

     4.4     Specimen Class C Warrant Certificate. (2)

                                 Page 19 of 46
<PAGE>

     4.5     Specimen Class D Warrant Certificate. (2)

     4.6     Warrant Agreement between the Company and Continental Stock
             Transfer & Trust Company (the "Warrant Agent"), dated as of
             December 20, 1996, (2)

     4.7     Letter Agreement, dated June 10, 1997, from Sheppard, Mullin,
             Richter & Hampton LLP to the Warrant Agent. (4)

    10.1     Loan and Security Agreement, dated April 4, 1997, by and
             between the Company and FINOVA Capital Corporation ("FINOVA"). (4)

    l0.2     Amendment to Loan Agreement, dated April 4, 1997, between the
             Company and FINOVA. (4)

    10.3     Collateral Assignment, Patent Mortgage and Security Agreement,
             dated as of April 4, 1997, by and between the Company and FINOVA.
             (4)

    10.4     Waiver and Second Amendment to Loan Agreement, dated June 26,
             1997, between the Company and FINOVA. (4)

    10.5     Waiver and Third Amendment to Loan Agreement, dated
             November 13, 1997, between the Company and FINOVA. (5)

    10.6     Waiver and Fourth Amendment to Loan Agreement, dated
             February 11, 1998 between the Company and FINOVA. (7)

    10.7     Waiver and Fifth Amendment to Loan Agreement, dated
             March 27, 1998, between the Company and FINOVA. (8)

    10.8     Second Deed of Amendment, by and between the Company
             and ORA Electronics (UK) Limited ("ORA UK"), dated as of April 1,
             1998. (7)

    10.9     Distribution Agreement, by and between Alliance Research
             Corporation (predecessor to the Registrant) and Contactace Limited
             (doing business as ORA UK), dated as of 1990. (7)

    10.10    Form of Indemnification Agreement. (3)

    10.11    Employment Agreement dated as of December 19, 1996 by and
             between the Company and Gershon N. Cooper. (3)

    10.12    Amended and Restated Promissory Note dated December 17, 1996,
             made by Gershon, Cooper and Ruth Cooper in favor of the
             Company. (3)

    10.13    Promissory Note dated December 6, 1996, made by Gershon N. Cooper
             and Ruth Cooper in favor of the Company. (3)

    10.14    Amended and Restated Commercial Credit Agreement dated as of
             December 31, 1996, by and among Sanwa Bank California, the Company,
             Gershon N. Cooper, Ruth Cooper and the Cooper Living Trust. (3)

    10.15    Amended and Restated Security Agreement dated as of December 31,
             1996, by and between the Company and Sanwa Bank California. (3)

                                  Page 20 of 46
<PAGE>
    10.16    Secured Promissory Note dated as of February 1, 1989, made by
             the Company in favor of the Aid Association for Lutherans. (3)

    10.17    Promissory Note dated as of December 23, 1996, made by the
             Company in favor of General Funding Corporation. (3)

    10.18    ORA Electronics, Inc. 1996 Stock Plan. (3)

    10.19    Form of ORA Electronics, Inc., 1996 Stock Plan Stock Option
             Grant Agreement. (3)

    10.20    Form of ORA Electronics, Inc. Non-Employee Directors Stock
             option Plan. (3)

    10.21    Form of ORA Electronics, Inc. Non-Employee Directors Stock
             Option Agreement. (3)

    11       Statement re: Computation of Earnings Per Share.

    23.1     Independent Auditors' Consent of Richard & Hedrick.

    27       Financial Data Schedule.

    99.1     Letter Agreement dated December 19, 1996 between the Company and
             DLS Financial Services, Inc. (3)

    99.2     Registration Rights Agreement, dated as of December 20, 1996,
             between the Company and The Cooper Family Living Trust. (3)

    99.3     Settlement Agreement and Mutual General Release dated March 2,
             1998, between the Registrant and Telular Corporation.   (6)
--------------------------------------------------------------------------------
    (1) Incorporated by reference from the Form 8-K/A filed on December 20,
        1996, by North American Energy of Delaware, Inc., predecessor to the
        Registrant.

    (2) Incorporated by reference from the Registrant's Form 8-K filed on
        December 20, 1996.

    (3) Incorporated by reference from the Registrant's Form 10-Q filed on
        February 14, 1997.

    (4) Incorporated by reference from the Registrant's Form 10-K filed on June
        30, 1997.

    (5) Incorporated by reference from the Registrant's Form 10-Q filed on
        February 14, 1998.

    (6) Incorporated by reference from the Registrant's Form 8-K filed on March
        3, 1998.

    (7) Incorporated by reference from the Registrant's Form 8-K filed on April
        17, 1998.

    (8) Incorporated by reference from the Registrant's Form 10-K filed on June
        29, 1998.

(b) Reports on Form 8-K:

    No reports on Form 8-K were filed by the Company during the fiscal
    Quarter ended March 31, 1999.

                                  Page 21 of 46
<PAGE>



                              ORA ELECTRONICS, INC.

                          INDEX TO FINANCIAL STATEMENTS


INDEPENDENT AUDITORS' REPORT (Richard & Hedrick)

FINANCIAL STATEMENTS:

Balance sheets at March 31, 1999 and 1998

Statements of operations for the twelve month
periods ended March 31, 1999, 1998 and 1997

Statements of stockholders' equity for the
twelve-month periods ended March 31, 1999 and 1998

Statements of cash flows for the twelve-month
periods ended March 31, 1999, 1998 and 1997

Notes to financial statements


































                                 Page 22 of 46
<PAGE>



                                RICHARD & HEDRICK
             ACCOUNTANCY CORPORATION * CERTIFIED PUBLIC ACCOUNTANTS
                        MEMBER OF AICPA * MEMBER OF CSCPA
                    5857 UPLANDER WAY * CULVER CITY, CA 90230
                      PHONE 310-348-4188 * FAX 310-348-4189


June 17, 1999


ORA Electronics, Inc.
Chatsworth, CA 91311


To the Shareholders and the Board of Directors of ORA Electronics, Inc.:

We have audited the accompanying balance sheets of ORA Electronics, Inc. as of
March 31, 1999 and 1998 and the related statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended March 31,
1999. These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating an overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ORA Electronics, Inc. as of
March 31, 1999 and 1998 and the results of their operations and their cash flows
for each of the three years in the period ended March 31, 1999, in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has not obtained a working capital line of credit that raises substantial
doubt about the ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.



/s/ Richard & Hedrick
--------------------------
Richard & Hedrick
An Accountancy Corporation


                                 Page 23 of 46
<PAGE>



                              ORA ELECTRONICS, INC.
                                  BALANCE SHEET
                             March 31, 1999 and 1998

ASSETS
------                                            1999                  1998
                                                  ----                  ----
Current assets:
Cash and cash equivalents (Note 5)            $ 1,807,940         $  407,694
Trade accounts receivable, less
  allowances for sales returns and
  doubtful accounts (Note 5)                    2,206,849          3,103,736
Inventories (Notes 5 and 14)                    2,565,673          4,627,251
Prepaid expenses                                  103,114             74,276
                                              -----------        -----------

      Total current assets                      6,683,576          8,212,957

Property and equipment, less accumulated
  depreciation (Note 7)                         6,038,045          6,231,494

Other assets:
Loan receivable, officer (Note 6)                 609,802            579,833
Deferred expenses (Note 5)                        295,728            304,875
                                              -----------        -----------

      Total assets                            $13,627,151        $15,329,159

                                              ===========        ===========

      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current maturities of long-term debt
      (Note 9)                                   $693,830           $488,604
   Notes payable (Note 8)                         946,775          1,355,847
   Trade payables                               1,966,103          2,925,677
   Accrued interest (Notes 8 and 9)                49,707            101,648
   Other accounts payable and
     accrued expenses                           2,132,403          2,210,026
                                              -----------        -----------

      Total current liabilities                 5,788,818          7,081,802

Long-term debt (Note 9)                         5,653,510          6,105,477
                                              -----------        -----------

      Total liabilities                        11,442,328         13,187,279
                                              -----------        -----------

               SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS




                                  Page 24 of 46
<PAGE>


Commitments and contingencies (Note 12)

Stockholders' equity:

Preferred stock $.001 par value;
  authorized 5,000,000 shares;
  none issued                                        -                   -
Common stock $.001 par value;
  authorized 30,000,000 shares;
  reserved for options and warrants
  2,599,402 shares and 2,586,868 shares
  at March 31, 1999 and 1998; issued and
  outstanding 6,909,959 shares and
  6,908,722 shares at March 31, 1999
  and 1998. (Note 3)                               6,910               6,909
Paid-in capital (Note 3)                       6,125,379           6,125,380
Retained earnings (deficit)                   (3,947,466)         (3,990,409)
                                              -----------        -----------

      Total stockholders' equity               2,184,823           2,141,880
                                              -----------        -----------

      Total liabilities and
        stockholders' equity                 $13,627,151         $15,329,159
                                             ===========         ===========


























               SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS




                                 Page 25 of 46
<PAGE>


                              ORA ELECTRONICS, INC.
                             STATEMENT OF OPERATIONS
                FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S>                                        <C>        <C>           <C>
                                           1999           1998          1997
                                           ----           ----          ----

Net sales (Notes 5 & 11)               $13,544,551    $15,443,432   $18,718,113

Cost of goods sold                       8,005,084      9,152,641    12,211,623
                                       -----------    -----------   -----------
     Gross profit                        5,539,467      6,290,791     6,506,490
                                       -----------    -----------   -----------
Operating expenses:
     Selling and shipping                2,449,563      2,434,547     3,163,863
     Administrative and general          4,121,929      5,742,427     5,183,082
                                       -----------    -----------   -----------
       Total operating expenses          6,571,492      8,176,974     8,346,945
                                       -----------    -----------   -----------
Loss from operations                     1,032,025      1,886,183     1,840,455
Other (income) expenses:
     Interest expense                      714,619        702,128     1,072,107
     Interest/other income              (1,789,587)       (10,627)     (231,620)
                                        -----------    -----------   -----------
       Total other (income) expenses    (1,074,968)       691,501       840,487
                                        -----------    -----------   -----------
Income (loss) before income taxes           42,943     (2,577,684)   (2,680,942)

Income tax (benefit)(Note 15)                    0              0             0
                                       -----------    -----------   -----------
          Net income (loss)            $    42,943    $(2,577,684)  $(2,680,942)
                                      ============    ===========   ===========

Earnings (loss) per share:
     Basic and diluted                 $      0.01    $     (0.39)  $     (0.41)

Number of shares used in the
   per share calculation:
     Basic and diluted                   6,909,292      6,627,697     6,589,068

</TABLE>

               SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS











                                 Page 26 of 46
<PAGE>



                              ORA ELECTRONICS, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

<TABLE>
<CAPTION>

                                               Common Stock                                               Retained
                                                            Number                Preferred   Paid-In     Earnings   Stockholders'
                                    Options    Warrants     of Shares    Amount      Stock    Capital     (Deficit)     Equity
                                    -------    --------     ---------    ------   ----------  -------     --------   ------------
<S>                                <C>        <C>           <C>          <C>        <C>     <C>         <C>            <C>
Balance, March 31, 1997             208,480   2,156,000     6,589,068    $6,589     $ 0     $5,806,810  ($1,412,725)   $4,400,674

Common shares issued in satisfaction
   of Telular settlement                                      300,000       300                299,700                    300,000

Issuance of warrants                            259,888

Issuance of common shares                                      19,654        20                 18,870                     18,890

Employees stock plan forfeitures   (37,500)

Net loss for the year ended
   March 31, 1998                                                                                        (2,577,684)   (2,577,684)
                                 ---------    ---------     ---------    ------   --------  ----------  -----------    ----------
Balance, March 31, 1998            170,980    2,415,888     6,908,722    $6,909     $ 0     $6,125,380  $(3,990,409)   $2,141,880

Issuance of Warrants                             12,534

Issuance of common shares                                       1,237         1                     (1)

Net income for the year ended
   March 31, 1999                                                                                            42,943        42,943
                                 ---------    ---------     ---------    ------   --------  ----------  -----------    ----------
Balance, March 31, 1999            170,980    2,428,422     6,909,959    $6,910     $ 0     $6,125,379  $(3,947,466)   $2,184,823
                                 =========    =========     =========    ======   ========  ==========  ===========    ----------




</TABLE>


               SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS










                                 Page 27 of 46
<PAGE>

                              ORA ELECTRONICS, INC.
                             STATEMENT OF CASH FLOWS
                FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
                                                              1999                 1998                  1997
                                                              ----                 ----                  ----
<S>                                                    <C>                   <C>                    <C>
Cash flows from operating activities:
     Net income (loss)                                  $    42,943          $  (2,577,684)         $ (2,680,942)
     Adjustments to reconcile net income (loss) to net
        cash provided by (used in) operating activities:
         Depreciation and amortization                      253,422                266,588               343,831
         Provision for losses and returns on
           accounts receivable                             (333,101)               305,371              (468,047)
         Changes in assets and liabilities:
             Accounts receivable                          1,229,988              1,081,854               302,744
             Inventories                                  2,061,578                821,777               363,702
             Federal tax refund                                   0                219,927               190,876
             Prepaid expenses                               (28,839)                (8,383)              (28,580)
             Accounts payable, accrued interest and
               other accrued expenses                    (1,089,137)            (1,046,527)            1,012,215
                                                        -----------            -----------           -----------
                 Net cash provided by (used in)
                   operating activities                   2,136,854               (937,077)             (964,201)
                                                        -----------            -----------           -----------
Cash flows from investing activities:
     Capital expenditures                                   (50,826)              (182,001)               29,585
     Loan receivable, officer                               (29,969)               (28,497)             (307,355)
     Proceeds from issuance of stock                              1                318,890             5,804,893
                                                       ------------            -----------           -----------
             Net cash provided by (used in)
               investing activities                         (80,794)               108,392             5,527,123
                                                       ------------            -----------           -----------
Cash flows from financing activities:
     Borrowing (repayment) of notes payable                (409,072)                98,650            (3,017,803)
     Repayment of trust deed payable                        (69,716)               (69,715)              (57,267)
     Issuance (repayment) of long-term debt                (177,026)               885,797            (1,524,200)
                                                        ------------            -----------           -----------
             Net cash provided by (used in)
               financing activities                        (655,814)               914,732            (4,599,270)
                                                        ------------           -----------           -----------
Net increase (decrease) in cash and cash equivalents       1,400,246                86,047               (36,348)
Cash and cash equivalents at beginning of year               407,694               321,647               357,995
                                                        ------------           -----------           -----------
Cash and cash equivalents at end of year                $  1,807,940           $   407,694            $  321,647
                                                        ============            ==========            ==========
Supplemental disclosure of cash flow information:
     Interest paid                                      $    622,758           $   617,307            $2,636,350
                                                        ============            ==========            ==========
     Income taxes paid                                  $          0           $         0            $        0
                                                        ============            ==========           ===========
</TABLE>
               SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS


                                 Page 28 of 46
<PAGE>


                              ORA ELECTRONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - BUSINESS:

ORA Electronics, Inc. (the "Company") is a developer and supplier of interface,
connectivity solutions and peripheral accessories for wireless communication
devices. The Company's products supplement the effectiveness of cellular
telephones, personal communications systems ("PCS"), pagers, computing devices
and Intelligent transportation Systems industry. The Company currently carries
over 1,100 products which are sold to over 400 customers in the United States,
and throughout North, Central and South America. Among the Company's customers
are major retailers such as OfficeMax and Cablevision Electronics, service
providers and wireless carriers, original equipment manufacturers ("OEMs"), auto
manufacturers, regional distributors and dealers.

NOTE 2 - FINANCIAL RESULTS AND LIQUIDITY

The Company has incurred operating losses of $1,032,025, $1,886,183 and
$1,840,455 in the fiscal years ended March 31, 1999, 1998 and 1997,
respectively. For several years the company's major competitors, many with
greater resources, have aggressively lowered their selling prices in an attempt
to increase market share. Although the company has benefited from its own
internal cost reduction programs, the effects of lower pricing by major
competitors has more than offset the company's cost reductions.

The Chief Executive Officer, along with the rest of the company's management
team, has been developing a broad operational and financial restructuring plan.
The plan, which is designed to leverage the company's brand, distribution and
technology strengths, includes reducing costs, disposition of certain assets,
focusing on development of alternative channels of distribution and capitalizing
on the company's patented technologies. Restructuring costs must be incurred to
implement the plan.

Going forward, significant cash flow will be needed to pay the restructuring
costs to implement the proposed business plan and to fund losses until the
company has returned to profitability. While there is no assurance that funding
will be available to execute the plan, the company is continuing to seek
financing to support its turnaround efforts and is exploring a number of
alternatives in this regard.

The company's independent public accountants have included a "going concern"
emphasis paragraph in their audit report accompanying the March 31, 1999
financial statements. The paragraph states that the company's recurring losses
and its inability to secure working capital financing raise substantial doubt
about the company's ability to continue as a going concern and cautions that the
financial statements do not include adjustments that might result from the
outcome of this uncertainty.







                                 Page 29 of 46
<PAGE>


Existing cash flow is not expected to be sufficient to cover liquidity
requirements after September 30, 1999, and the company is currently facing the
prospect of not having adequate funds to operate its business (See Note 8 to
the financial statements for details of the Company's efforts to obtain a
replacement working capital line of credit). There can be no assurance that an
affordable working capital credit facility can be arranged or that any long-term
restructuring alternative can be successfully initiated or implemented by
September 30, 1999, in which case the company may be compelled to pursue a
bankruptcy filing in the absence of a proposed or pre-approved financial
restructuring.

Management believes that, despite the financial hurdles and funding
uncertainties going forward, it has under development a business plan that, if
successfully funded and executed as part of a financial restructuring, can
significantly improve operating results. The support of the company's vendors,
customers, potential lenders, stockholders and employees will continue to be key
to the company's future success.


NOTE 3 - REORGANIZATION:

In December 1996, Alliance Research Corporation merged into a newly formed
Delaware corporation named ORA Electronics, Inc. (ORA Electronics was a trade
name of Alliance Research Corporation).

On December 20, 1996, North American Energy of Delaware, Inc. merged into ORA
Electronics, Inc. by exchanging 250,000 common shares of ORA Electronics, Inc.
and options for 2,200 common shares at $1.50 per share, and warrants for
2,156,000 common shares for all the shares issued and to be issued of North
American Energy of Delaware, Inc.

In consideration for advisory services rendered for this transaction, ORA
Electronics, Inc. issued 160,566 common shares and options for 75,180 common
shares.

The options and warrants are exercisable as follows:

Options                Warrants*             Price               Expires
-------           -------------------        -----               -------

14,772            Class A     480,819       $   5.00        June 30, 2000
20,208            Class B     646,859       $  10.00        June 30, 2000
17,478            Class C     565,772       $  15.00        June 30, 2000
23,022            Class D     733,897       $  20.00        December 20, 2001
------                      ---------
75,480                      2,427,347
======                      =========

North American Energy of Delaware, Inc. had no business expenses for the five
years previous to the merger date and no tangible assets or liabilities at the
merger date.

* Actual warrant numbers are subject to the round-up provisions under the terms
  of the merger.


                                 Page 30 of 46
<PAGE>


NOTE 4 - S CORPORATION STATUS:

The Company, with the consent of its shareholders, had elected S corporation
status effective April 1, 1987 for both federal and state income tax purposes.
In lieu of federal corporate income taxes, the shareholders of an S corporation
are taxed on their proportionate share of the Company's taxable income. For
state purposes, S corporations are taxed at a rate of 1 1/2% of taxable income.

In connection with the S corporation election, the Company also elected to
retain its fiscal year end of March 31. According to Internal Revenue Service
regulations, to compensate the government for the tax deferral obtained through
the use of a taxable year end other than the required taxable year end of
December 31, the Company is obligated to make an annual "required payment" on
May 15. This payment is considered a deposit and is refundable when there is no
longer a tax deferral resulting from the use of a fiscal year end other than
December 31. The amount deposited as "required payment" for the year ended March
31, 1997 was $219,927, which was refunded to the company in the fiscal year
ended March 31, 1998.

In December 1996, the Company terminated the S corporation election and has been
subsequently taxed as a C corporation.

































                                 Page 31 of 46
<PAGE>


                              ORA ELECTRONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 5 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Cash and Cash Equivalents
-------------------------

Cash and cash equivalents include short-term investments with original
maturities of 90 days or less.

Allowance for Sales Returns and Doubtful Accounts
-------------------------------------------------

The Company reduces gross sales by the amount of discounts and returns to
determine net sales. The Company estimates a reserve for returns based on
historical experience and the amount of gross sales.

The reserve is adjusted periodically to reflect the Company's actual return
experience. The Company provides allowances for doubtful accounts receivable
when it determines that such amounts are uncollectible. Actual bad debt and
sales return experience has been in line with management's expectations. The
allowances are as follows at March 31,

                                                  1999                1998
                                              -----------           -------

  Trade accounts receivable                  $  2,904,347         $ 4,134,335
  Less allowance for doubtful accounts           (200,000)           (300,000)
  Less allowance for sales returns               (497,498)           (730,599)
                                             ------------         -----------
    Trade accounts receivable, net           $  2,206,849         $ 3,103,736
                                             ============         ===========

Inventories
-----------

Inventories are stated at the lower of cost (determined on a weighted average
cost basis) or market. Market value is based upon net realizable value.
Appropriate consideration is given to deterioration, obsolescence, and other
factors in evaluating net realizable value.

Goodwill
--------

Goodwill consists of the excess of consideration paid over the fair value of net
assets acquired and is amortized on a straight-line basis against income over 40
years. Goodwill of $299,188 at March 31, 1999 and 1998 is included in deferred
expenses net of accumulated amortization of $36,790 and $29,310 respectively.






                                 Page 32 of 46
<PAGE>


Revenues
--------

Revenues are recognized upon shipment of product to customers.

Research and Development Expenses
---------------------------------

Research and development expenditures are expensed as incurred and are included
in general and administrative expenses.

The total research and development costs for new products for the years ended
March 31, 1999, 1998 and 1997 were approximately $625,000, $440,000 and $550,000
respectively, including $57,000, $36,000 and $80,000 of purchased materials that
do not have alternative future uses.

Use of Estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Concentration of Cash Balances
------------------------------

The Company maintains cash balances with two banks. The amount on deposit in one
financial institution exceeds the $100,000 federally insured limit by $1,628,032
at March 31, 1999.

Advertising
------------

Cooperative advertising obligations are accrued and the costs expensed at the
same time the related revenue is recognized. All other advertising costs are
expensed as incurred.

Comparatives
------------

For comparative purposes, certain amounts in the financial statements from the
prior year have been reclassified.

Recent Accounting Pronouncements
--------------------------------

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income"
("SFAS 130") effective for fiscal years beginning after December 15, 1997. The
new rules establish standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is defined as the change in equity of a business enterprise
during a period, resulting from transactions and other events and circumstances
from nonowner sources. The Company has adopted the provisions of SFAS 130 as of
April 1, 1998. For all periods presented, there was no comprehensive income.


                                 Page 33 of 46
<PAGE>


In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information" (SFAS 131") effective for fiscal years
beginning after December 15, 1997. The new rules establish revised standards for
public companies to report financial and other information about key
revenue-producing segments of the entity for which such information is available
and is utilized by the chief operating decision maker. Specific information to
be reported for individual segments includes profit or loss, certain revenue and
expense items and total assets. A reconciliation of segment financial
information to amounts reported in the financial statements would be provided.
SFAS 131 is effective for the Company in fiscal 1999. The Company currently
evaluates its operations as one segment.

NOTE 6 - OFFICER LOANS RECEIVABLE:

Officer loans receivable of $609,802, at March 31, 1999, consist of a note for
$280,855, a note for $243,982 and accrued interest of $84,965. Both notes bear
interest at 5.05% and principal and interest are due December 31, 1999.

NOTE 7 - PROPERTY AND EQUIPMENT:

Property and equipment are stated at cost. Major renewals and improvements are
capitalized while maintenance and repairs are expensed as incurred. Interest and
taxes have been capitalized in connection with the construction of building
improvements. The capitalized interest and taxes are included in the cost of the
building and are being depreciated over the building's estimated useful life.
Property and equipment are depreciated on the straight-line and accelerated
methods over the estimated useful lives of the property as follows:

                         Useful Life
Assets                     In Years          March 31, 1999     March 31, 1998
                                             --------------     --------------

Land                                           $2,900,000         $2,900,000
Building and
  improvements             31.5 - 39            4,245,548          4,238,969
Machinery and
  equipment                   5 - 7               687,386            710,263
Computer equipment            5                   491,824            475,368
Furniture and
  fixtures                    5 - 7               438,152            429,821
                                               ----------         ----------
                                                8,762,910          8,754,421
Less: accumulated
  depreciation                                  2,724,865          2,522,927
                                               ----------          ---------
    Net property and
       equipment                               $6,038,045         $6,231,494
                                               ==========         ==========







                                 Page 34 of 46
<PAGE>


                              ORA ELECTRONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 8 - NOTES PAYABLE:

On April 7, 1997, the Company secured a $5,000,000 line of credit from FINOVA
Capital Corporation ("FINOVA"). The line of credit facility with FINOVA is
secured by all inventory, equipment, accounts receivable and intellectual
property. The initial term of the line of credit is two years with provisions
for automatic renewals thereafter in one year increments. Borrowings incur
interest at 1% above the reference rate of Citibank, N.A. and there is an unused
line fee of 0.5%. The Company's funds are swept daily and capital is made
available based on 70% of eligible accounts receivable and 35% of eligible
inventory.

Under the line of credit facility, the Company is required to maintain various
covenants, including meeting certain net worth requirements, a liquidity ratio,
a debt service coverage ratio and restrictions of capital expenditures,
additional indebtedness and the payment of dividends. At January 31, 1998, the
Company was not in compliance with the Debt Service Coverage Ratio covenant. On
March 27, 1998, the covenant violation was waived by FINOVA and all required
covenants were reset at more achievable levels. In January, 1999, the Company
was notified by FINOVA that its revolving line of credit would not be extended
after its scheduled expiration date of April 4, 1999. On May 12, 1999, the
entire balance owing at that date was paid and the relationship with FINOVA was
terminated. The Company is attempting to find a replacement credit facility, but
no assurances can be given that the Company will be able to do so.


























                                 Page 35 of 46
<PAGE>

                              ORA ELECTRONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 9 - LONG-TERM DEBT:

                                                      March 31,       March 31,
                                                        1999            1998
                                                      ---------       ---------
Long-term debt consists of the following:

Trust deed payable, secured by
certain real estate, payable in
monthly installments of $43,418
including interest at 9.875%
per annum, due February 2019,
callable with six months notice.                    $  4,531,800    $ 4,601,516

Note payable with interest payable
at a rate of 8% per annum, principal
and interest due December 31, 2001.                    1,198,630      1,106,768

Note payable to Telular Corporation,
non-interest bearing, payable in monthly
installments of $25,000 with additional payments
of $225,000 on March 1, 1999 and February 1,
2000, due February 1, 2000.                              650,000      1,000,000
Less unamortized discount, 10% per annum                 (33,090)      (114,203)
                                                     -----------    -----------
Total Debt                                             6,347,340      6,594,081

Less:  current maturities                                693,830        488,604
                                                     -----------    -----------
      Total Long-Term Debt                           $ 5,653,510    $ 6,105,477
                                                     ===========    ===========


Maturities of long-term debt for the years subsequent to March 31, 1999 are as
follows:

                                            2000           $   693,829
                                            2001                84,870
                                            2002             1,200,408
                                            2003               103,318
                                            2004               103,318
                                      Thereafter             4,161,597
                                                           -----------
                                                           $ 6,347,340
                                                           ===========

NOTE 10 - 401(k) PROFIT SHARING PLAN:

On January 1, 1992, the Company adopted a defined contribution Profit Sharing
Savings Plan pursuant to Section 401(K) of the Internal Revenue Code covering
substantially all eligible officers and employees. Under the terms of the Plan,
employees can voluntarily elect to contribute to the Plan, by salary reduction,
up to 15% of their compensation, subject to certain IRS limitations then in

                                 Page 36 of 46
<PAGE>

effect. Additionally, the Company can, at its discretion, match 100% of the
voluntary employee contributions not to exceed $250. The Company has received a
determination letter from the IRS indicating that the above Plan is qualified
within the terms of the applicable provisions of ERISA.

NOTE 11 - MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK:

At March 31, 1999 approximately 67.6% of the trade accounts receivable were
represented by two customers and at March 31, 1998, approximately 69.4% of the
trade accounts receivable were represented by three customers. For the fiscal
year ended March 31, 1999, two customers accounted for approximately 52.3% of
the Company's net sales and for the fiscal year ended March 31, 1998, two
customers accounted for approximately 55.8% of the Company's net sales.

To reduce credit risk, the Company performs ongoing credit evaluations of its
customers financial condition but does not generally require collateral.

The Company purchases substantially all of its inventory through a foreign
trading company. The trading company negotiates purchases with various foreign
manufacturing companies and remits payment to these companies.

NOTE 12 - COMMITMENTS AND CONTINGENCIES:

Legal Proceedings
-----------------

The Company and Telular Corporation settled their patent lawsuit pursuant to a
Settlement Agreement and Mutual General Release dated March 2, 1998. According
to the terms of the settlement, Telular Corporation will receive from the
Company cash payments totaling $1,500,000 over a two year period and 300,000
shares of the Company's common stock and may receive additional shares of common
stock on February 1, 2000 if necessary to ensure that the total shares of such
common stock received by Telular Corporation have a market value of $1,500,000
as of such date. The Company has estimated the current value of the final
settlement at $1,685,797, of which $459,243 had been accrued for in prior
periods. The remaining $1,226,554 has been included in Administrative and
General expenses for the year ended March 31, 1998.

The Company is involved in other legal proceedings, many of which arise in the
ordinary course of its business. While any litigation contains as element of
uncertainty, management believes that the outcome of such proceedings will not
have a material adverse effect on the Company's results of operations.

NOTE 13 -  STOCK PLANS

The Company's 1996 stock plans, approved by the shareholders, provide grants of
non-qualified or incentive stock options, restricted stock awards and stock
appreciation "SARs". All plans are administered by the Company's Board of
Directors ("Board"). Stock options may be granted with or without SARs. The
total number of shares of Common Stock subject to issuance under the 1996 stock
plan is 2,000,000, subject to adjustments as provided for in the 1996 Stock
Plan. Grant prices for incentive stock options and non-qualified stock options
are not less than 100% and 85% of the fair market value of the Common Stock at
the time of grant, respectively. Options and SARs normally extend for 10 years
and under Board policy become exercisable in installments of 25 percent per year
commencing one year from the date of grant or over a vesting period determined
by the Board.

                                 Page 37 of 46
<PAGE>


                              ORA ELECTRONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS


Restricted stock awards issued under the plan provide that shares awarded may
not be sold or otherwise transferred until restrictions as established by the
Board have lapsed. Upon termination of employment, shares upon which
restrictions have not lapsed must be returned to the Company.

The following table summarizes stock option activity:

Option Shares                                    1999              1998
                                              ---------          -------
Outstanding at beginning
  of fiscal year                                95,500                 0
Granted                                              0           133,000
Exercised                                            0                 0
Forfeitures                                          0           (37,500)
                                            ----------        ----------
Outstanding March 31
  ($5.00 per share)                             95,500            95,500
                                            ==========        ==========
Exercisable March 31                            47,750            23,875
                                            ==========        ==========

The shareholders also approved a Non-Employee Directors Stock Option Plan. Under
the plan, a maximum of 100,000 shares may be granted to non-employee directors
at not less than 100% of the fair market value at the date of grant. Shares may
be exercised in two equal installments commencing on the first anniversary of
the date of the grant.

NOTE 14 - LOWER OF COST OR MARKET ADJUSTMENT:

Adjustments of $579,000, $978,256 and $820,973 were made in the fiscal years
ended March 31, 1999, 1998 and 1997, respectively, to reflect inventory at the
lower of cost or market, as determined by management's estimates of value below
the Company's cost.

NOTE 15 - INCOME TAXES:

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, and operating loss and
tax credit carryforwards. Significant components and the approximate tax effect
of the Company's deferred tax assets as of March 31, 1999 and 1998 are as
follows:


                                                  1999                1998
                                              -----------           -------

  Net operating loss carryforwards           $  1,121,543        $ 1,164,486
  Less valuation allowance                     (1,121,543)        (1,164,486)
                                             ------------        -----------
    Net deferred tax asset                   $      -            $     -
                                             ============        ===========

                                 Page 38 of 46
<PAGE>


The company establishes valuation allowances in accordance with the provisions
of FASB Statement No. 109, "Accounting for Income Taxes". The company
periodically reviews the adequacy of the valuation allowance to estimate whether
or not these tax benefits will be realized in future periods. Management
believes that sufficient uncertainty exists regarding the realizability of the
net operating losses, and accordingly, a valuation allowance has been recorded
at March 31, 1999 and 1998.

No income taxes were paid for the years ended March 31, 1999 and 1998.

NOTE 16 - OTHER INCOME:

In April, 1998, pursuant to the terms of a Second Deed of Amendment, the company
granted ORA Electronics (UK) Limited ("ORA UK") an exclusive royalty-free right
to use certain of the Company's trademarks, including, without limitation, the
"ORA" name, in perpetuity worldwide except for North, Central, and South
America. The total consideration paid by ORA UK to the company for such
perpetual right was 1,000,000 GBP, or approximately $1,659,000, which is
included in Other Income in the fiscal year ended March 31, 1999. Gershon N.
Cooper, President and Chief Executive Officer of the company, is a former member
of the Board of Directors of ORA UK.

NOTE 17 - YEAR 2000 ISSUE

Many computer systems and other equipment with embedded chips or processors in
use today were designed and developed using two digits, rather than four, to
specify the year. As a result, such systems will recognize the Year 2000 as "00"
and may assume that the year is 1900 rather than 2000. This is commonly known as
the Year 2000 issue, which could potentially result in a system failure or in
miscalculations causing disruptions of operations, including among other things,
a temporary inability to process transactions, send invoices or engage in other
similar normal business activities. The Company has been informed that the
portion of the Company's computer software systems relating to the general
ledger, payroll and other employee records is presently Year 2000 compliant. The
Company is in the process of evaluating the potential cost to it in addressing
the Year 2000 issue with respect to its other software and the potential
consequences of an incomplete or untimely resolution of the Year 2000 issue. The
Company has been given estimates in the $100,000 to $150,000 range to purchase
and implement new Year 2000 compliant software for those systems that the
Company is aware require such replacement. Although the Company believes that it
will not incur significant costs above these estimates to become completely Year
2000 compliant, no assurance can be given that the Company will not incur
significant additional costs in addressing the Year 2000 issue or that the
failure to adequately address the Year 2000 issue will not have a material
adverse affect upon the Company.

The Company is contacting its major suppliers, major customers, financial
institutions and others with whom it conducts business to determine that they
will be able to resolve the Year 2000 issue in matters affecting the Company.
The Company at this time cannot make any predictions as to the degree of
compliance by such third parties or the consequences of their noncompliance.
However, if those third parties with whom the Company conducts business are
unsuccessful in implementing timely solutions, the Year 2000 issue could have a
material adverse effect on the Company's business, financial condition and
results of operations.

                                 Page 39 of 46
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 29th of June,
1999.

                                   ORA ELECTRONICS, INC.



                                   By:    /s/ Gershon N. Cooper
                                        -------------------------------
                                          Gershon N. Cooper, President
                                          [Printed Name and Title]


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 29th day of June, 1999.


           Signature                                 Title
           ---------                                 -----

 /s/ Gershon N. Cooper                       Chairman of the Board, Chief
---------------------------                  Executive Officer and President
Gershon N. Cooper                            (Principal Executive Officer)


 /s/ John M. Burris                          Vice President, Chief Financial
---------------------------                  Officer and Director (Principal
John M. Burris                               Financial and Accounting Officer)


 /s/ Mathew F. Jodziewicz                    Vice President of Technology and
---------------------------                  Legal Affairs, and Secretary and
Matthew F. Jodziewicz                        Director


 /s/ Ruth Cooper                             Director
---------------------------
Ruth Cooper








                                 Page 40 of 46
<PAGE>
                                  EXHIBIT INDEX

Exhibit No.                         Description                          Page
-------------------------------------------------------------------------------

     2.1     Plan of Reorganization of North American Energy of
             Delaware, InC. (1)

     2.2     Agreement and Plan of Merger between ORA Electronics, Inc.,
             a Delaware corporation, and North American Energy of
             Delaware, Inc., a Delaware corporation. (2)

     3.1     Restated Certificate of Incorporation of ORA
             Electronics, Inc, (2)

     3.2     Bylaws of ORA Electronics, Inc. (2)

     4.1     Specimen Common Stock Certificate of ORA Electronics,
             Inc. (2)

     4.2     Specimen Class A Warrant Certificate. (2)

     4.3     Specimen Class B Warrant Certificate. (2)

     4.4     Specimen Class C Warrant Certificate. (2)

     4.5     Specimen Class D Warrant Certificate. (2)

     4.6     Warrant Agreement between the Company and Continental Stock
             Transfer & Trust Company (the "Warrant Agent"), dated as of
             December 20, 1996, (2)

     4.7     Letter Agreement, dated June 10, 1997, from Sheppard, Mullin,
             Richter & Hampton LLP to the Warrant Agent. (4)

    10.1     Loan and Security Agreement, dated April 4, 1997, by and
             between the Company and FINOVA Capital Corporation
             ("FINOVA"). (4)

    l0.2     Amendment to Loan Agreement, dated April 4, 1997, between
             the Company and FINOVA. (4)

    10.3     Collateral Assignment, Patent Mortgage and Security
             Agreement, dated as of April 4, 1997, by and between the
             Company and FINOVA. (4)

    10.4     Waiver and Second Amendment to Loan Agreement, dated June 26,
             1997, between the Company and FINOVA. (4)

    10.5     Waiver and Third Amendment to Loan Agreement, dated
             November 13, 1997, between the Company and FINOVA. (5)

    10.6     Waiver and Fourth Amendment to Loan Agreement, dated
             February 11, 1998 between the Company and FINOVA. (7)

    10.7     Waiver and Fifth Amendment to Loan Agreement, dated
             March 27, 1998, between the Company and FINOVA. (8)

                                 Page 41 of 46
<PAGE>

    10.8     Second Deed of Amendment, by and between the Company
             and ORA Electronics (UK) Limited ("ORA UK"), dated as
             of April 1, 1998. (7)

    10.9     Distribution Agreement, by and between Alliance Research
             Corporation (predecessor to the Registrant) and Contactace
             Limited (doing business as ORA UK), dated as of 1990. (7)

    10.10    Form of Indemnification Agreement. (3)

    10.11    Employment Agreement dated as of December 19, 1996 by and
             between the Company and Gershon N. Cooper. (3)

    10.12    Amended and Restated Promissory Note dated December 17, 1996,
             made by Gershon, Cooper and Ruth Cooper in favor of the
             Company. (3)

    10.13    Promissory Note dated December 6, 1996, made by Gershon N. Cooper
             and Ruth Cooper in favor of the Company. (3)

    10.14    Amended and Restated Commercial Credit Agreement dated as of
             December 31, 1996, by and among Sanwa Bank California, the Company,
             Gershon N. Cooper, Ruth Cooper and the Cooper Living Trust. (3)

    10.15    Amended and Restated Security Agreement dated as of December 31,
             1996, by and between the Company and Sanwa Bank California. (3)

    10.16    Secured Promissory Note dated as of February 1, 1989, made by
             the Company in favor of the Aid Association for Lutherans. (3)

    10.17    Promissory Note dated as of December 23, 1996, made by the
             Company in favor of General Funding Corporation. (3)

    10.18    ORA Electronics, Inc. 1996 Stock Plan. (3)

    10.19    Form of ORA Electronics, Inc., 1996 Stock Plan Stock Option
             Grant Agreement. (3)

    10.20    Form of ORA Electronics, Inc. Non-Employee Directors Stock
             option Plan. (3)

    10.21    Form of ORA Electronics, Inc. Non-Employee Directors Stock
             Option Agreement. (3)

    11       Statement re: Computation of Earnings Per Share.                 44

    23.1     Independent Auditors' Consent of Richard & Hedrick.              45

    27       Financial Data Schedule.                                         46


                                 Page 42 of 46
<PAGE>


    99.1     Letter Agreement dated December 19, 1996 between the Company and
             DLS Financial Services, Inc. (3)

    99.2     Registration Rights Agreement, dated as of December 20, 1996,
             between the Company and The Cooper Family Living Trust. (3)

    99.3     Settlement Agreement and Mutual General Release dated March 2,
             1998, between the Registrant and Telular Corporation.   (6)
--------------------------------------------------------------------------------

    (1) Incorporated by reference from the Form 8-K/A filed on December 20,
        1996, by North American Energy of Delaware, Inc., predecessor to the
        Registrant.

    (2) Incorporated by reference from the Registrant's Form 8-K filed on
        December 20, 1996.

    (3) Incorporated by reference from the Registrant's Form 10-Q filed on
        February 14, 1997.

    (4) Incorporated by reference from the Registrant's Form 10-K filed on June
        30, 1997.

    (5) Incorporated by reference from the Registrant's Form 10-Q filed on
        February 14, 1998.

    (6) Incorporated by reference from the Registrant's Form 8-K filed on March
        3, 1998.

    (7) Incorporated by reference from the Registrant's Form 8-K filed on April
        17, 1998.

    (8) Incorporated by reference from the Registrant's Form 10-K filed on June
        29, 1998.

























                                 Page 43 of 46
<PAGE>



                                                                    EXHIBIT 11
                                                                    ----------


               STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE




                                                   Year ended March 31,

                                           1999           1998          1997
                                           ----           ----          ----

Basic and diluted average shares
  outstanding                           6,909,292      6,627,697      6,589,068

Net income (loss)                     $    42,943    $(2,577,684)   $(2,680,942)

Basic and diluted income (loss)
  per share                                 $0.01         $(0.39)        $(0.41)

































                                 Page 44 of 46
<PAGE>



                                                               EXHIBIT 23.1
                                                               ------------



                         [RICHARD & HEDRICK LETTERHEAD]




                          INDEPENDENT AUDITORS' CONSENT
                          -----------------------------



We consent to the use of our audit report, June 17, 1999, in the annual report
on Form 10-K of ORA Electronics, Inc.




/s/  Richard & Hedrick
--------------------------------
     RICHARD & HEDRICK
     Los Angeles, California


     June 28, 1999



























                                 Page 45 of 46